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NATIONAL INSTITUTE OF HEALTH

PATENT LICENSE AGREEMENT – NONEXCLUSIVE

COVER PAGE

For theNIH’s internal use only:

License Number: L-302-2014/0

License Application Number: A-271-2014

Serial Number(s) of Licensed Patent(s) or Patent Application(s):

U. S. Patent 6,630,507, issued October 7, 2003. entitled “Cannabinoids as Antioxidants and Neuroprotectants” [HHS Ref. No. E-287-I997/2-US-06];

Australian Patent 766988, issued February 12, 2004, entitled “Cannabinoids as Antioxidants and Neuroprotectants” [HHS Ref. No. E-287-I997/2-AU-02];

European Patent 1071419, issued July 25, 2007, entitled “Cannabinoids as Antioxidants and Neuroprotectants” [HHS Ref. No. E-287-I997/2-EP-04];

U. K. Patent 1071419, issued July 25, 2007, entitled “Cannabinoids as Antioxidants and Neuroprotectants” [HHS Ref. No. E-287-I997/2-GB-07];

Irish Patent E14850, issued July 25, 2007, entitled “Cannabinoids as Antioxidants and Neuroprotectants” [HHS Ref. No. E-287-I997/2-IE-08],

Licensee: KannaLife Sciences Inc.

Cooperative Research and Development Agreement (CRADA) Number (if a subject invention):N/A

Additional Remarks: None

Public Benefit(s): Commercialization of this technology will benefit the public health by providing synthetic cannabinoid(s) and cannabidiol(s) based, FDA approved therapeutics to treat chronic traumatic encephalopathy (CTE) in humans.

This Patent License Agreement, hereinafter referred to as the“Agreement”, consists of this Cover Page, an attachedAgreement, a Signature Page, Appendix A (List of Patent(s) or Patent Application(s)), Appendix B (Fields of Use and Territory), Appendix C (Royalties), Appendix D ((Benchmarks and Performance), Appendix E (Commercial Development Plan), Appendix F (Example Royalty Report), and Appendix G (Royalty Payment Options). The Parties to thisAgreement are:

1)The National Institutes of Health(“NIH”), an agency within the Department of Health and Human Services (“HHS”); and

2)The person, corporation, or institution identified above and on the Signature Page, having offices at the address indicated on the Signature Page, hereinafter referred to as the“Licensee”.

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [ * * * ]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

TheNIH and theLicensee agree as follows:

1.BACKGROUND

1.1In the course of conducting biomedical and behavioral research, theNIH investigators made inventions that may have commercial applicability.

1.2By assignment of rights from theNIH employees and other inventors,HHS, on behalf of theGovernment, owns intellectual property rights claimed in any United States or foreign patent applications or patents corresponding to the assigned inventions.HHS also owns any tangible embodiments of these inventions actually reduced to practice by theNIH.

1.3The Secretary ofHHS has delegated to theNIH the authority to enter into thisAgreement for the licensing of rights to these inventions under35 U.S.C. §§200-212, theFederal Technology Transfer Act of 1986,15 U.S.C. §3710(a), and the regulations governing the licensing of Government-owned inventions,37 CFR Part 404.

1.4TheNIH desires to transfer these inventions to the private sector through commercialization licenses to facilitate the commercial development of products and processes for public use and benefit.

1.5TheLicensee desires to acquire commercialization rights to certain of these inventions in order to develop processes, methods, or marketable products for public use and benefit.

2.DEFINITIONS

2.1“Affiliate(s)” means a corporation or other business entity, which directly or indirectly is controlled by or controls, or is under common control with theLicensee. For this purpose, the term “control” shall mean ownership of more than fifty percent (50%) of the voting stock or other ownership interest of the corporation or other business entity, or the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the corporation or other business entity.

2.2“Benchmarks” mean the performance milestones that are set forth in Appendix D.

2.3“Commercial Development Plan” means the written commercialization plan attached as Appendix E.

2.4“First Commercial Sale” means the initial transfer by or on behalf of theLicensee or its sublicensees ofLicensed Products or the initial practice of aLicensed Process by or on behalf of theLicensee or its sublicensees in exchange for cash or some equivalent to which value can be assigned for the purpose of determiningNet Sales.

2.5“Government” means the Government of the United States of America.

2.6“Licensed Fields of Use” means the fields of use identified in Appendix B.

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2.7“Licensed Patent Rights” shall mean:

(a)Patent applications (including provisional patent applications and PCX patent applications) or patents listed in Appendix A, all divisions and continuations of these applications, all patents issuing from these applications, divisions, and continuations, and any reissues, reexaminations, and extensions of all these patents;

(b)to the extent that the following contain one or more claims directed to the invention or inventions disclosed in 2.7(a):

(i)continuations-in-part of 2.7(a);

(ii)all divisions and continuations of these continuations-in-part;

(iii)all patents issuing from these continuations-in-part, divisions, and continuations;

(iv)priority patent application(s) of 2.7(a); and

(v)any reissues, reexaminations, and extensions of all these patents;

(c)to the extent that the following contain one or more claims directed to the invention or inventions disclosed in 2.7(a): all counterpart foreign and U.S. patent applications and patents to 2.7(a) and 2.7(b), including those listed in Appendix A; and

(d)Licensed Patent Rights shallnot include 2.7(b) or 2.7(c) to the extent that they contain one or more claims directed to new matter which is not the subject matter disclosed in 2.7(a).

2.8“Licensed Processes” means processes, which in the course of being practiced, would be within the scope of one or more claims of theLicensed Patent Rights that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealable judgment of a court of competent jurisdiction.

2.9“Licensed Products” means tangible materials, which in the course of manufacture, use, sale, or importation, would be within the scope of one or more claims of theLicensed Patent Rights that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealable judgment of a court of competent jurisdiction.

2.10“Licensed Territory” means the geographical area identified in Appendix B.

2.11“Net Sales” means the total gross receipts for sales ofLicensed Products or practice ofLicensed Processes by or on behalf of theLicensee or its sublicensees, and from leasing, renting, or otherwise makingLicensed Products available to others without sale or other dispositions, whether invoiced or not, less returns and allowances, packing costs, insurance costs, freight out, taxes or excise duties imposed on the transaction (if separately invoiced), and wholesaler and cash discounts in amounts customary in the trade to the extent actually granted. No deductions shall be made for commissions paid to individuals, whether they are with independent sales agencies or regularly employed by theLicensee, or sublicensees and on its payroll, or for the cost of collections.

2.12“Practical Application” means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and in each case, under these conditions as to establish that the invention is being utilized and that its benefits are to the extent permitted by law orGovernment regulations available to the public on reasonable terms.

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3.GRANT OF RIGHTS

3.1TheNIH hereby grants and theLicensee accepts, subject to the terms and conditions of thisAgreement, a nonexclusive license under theLicensed Patent Rights in theLicensed Territory to make and have made, to use and have used, to sell and have sold, to offer to sell, and to import anyLicensed Products in theLicensed Fields of Use and to practice and have practiced anyLicensed Processes in theLicensed Fields of Use.

3.2ThisAgreement confers no license or rights by implication, estoppel, or otherwise under any patent applications or patents of theNIH other than theLicensed Patent Rights regardless of whether these patents are dominant or subordinate to theLicensed Patent Rights.

4.SUBLICENSING

4.1Upon written approval, which shall include prior review of any sublicense agreement by theNIH and which shall not be unreasonably withheld, theLicensee may enter into sublicensing agreements under theLicensed Patent Rights only when it concurrently licenses proprietary or in-licensed intellectual property rights. For the avoidance of doubt, theLicensee does not have the right to solely sublicense theLicensed Patent Rights.

4.2TheLicensee agrees that any sublicenses granted by it shall provide that the obligations to theNIH of Paragraphs 5.1, 5.2, 8.1, 10.1, 10.2, 12.5, and 13.7-13.9 of thisAgreement shall be binding upon the sublicensee as if it were a party to thisAgreement. TheLicensee further agrees to attach copies of these Paragraphs to all sublicense agreements.

4.3Any sublicenses granted by theLicensee shall provide for the termination of the sublicense, or the conversion to a license directly between the sublicensees and theNIH, at the option of the sublicensee, upon termination of thisAgreement under Article 13. This conversion is subject to theNIH approval and contingent upon acceptance by the sublicensee of the remaining provisions of thisAgreement.

4.4TheLicensee agrees to forward to theNIH a complete copy of each fully executed sublicense agreement postmarked within thirty (30) days of the execution of the agreement. To the extent permitted by law, theNIH agrees to maintain each sublicense agreement in confidence.

5.STATUTORY AND NIH REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS

5.1Prior to theFirst Commercial Sale, theLicensee agrees to provide theNIH with reasonable quantities ofLicensed Products or materials made through theLicensed Processes for theNIH’s research use.

5.2TheLicensee agrees that products used or sold in the United States embodyingLicensed Products or produced through use ofLicensed Processes shall be manufactured substantially in the United States, unless a written waiver is obtained in advance from theNIH.

6.ROYALTIES AND REIMBURSEMENT

6.1TheLicensee agrees to pay theNIH a noncreditable, nonrefundable license issue royalty as set forth in Appendix C.

6.2TheLicensee agrees to pay theNIH a minimum annual royalty as set forth in Appendix C.

6.3TheLicensee agrees to pay theNIH earned royalties as set forth in Appendix C.

6.4TheLicensee agrees to pay theNIH benchmark royalties as set forth in Appendix C.

6.5TheLicensee agrees to pay theNIH sublicensing royalties as set forth in Appendix C.

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6.6A patent or patent application licensed under thisAgreement shall cease to fall within theLicensed Patent Rights for the purpose of computing earned royalty payments in any given country on the earliest of the dates that:

(a)the application has been abandoned and not continued;

(b)the patent expires or irrevocably lapses; or

(c)the patent has been held to be invalid or unenforceable by an unappealed or unappealable decision of a court of competent jurisdiction or administrative agency.

6.7No multiple royalties shall be payable because anyLicensed Products orLicensed Processes are covered by more than one of theLicensed Patent Rights.

6.8On sales ofLicensed Products by theLicensee to sublicensees or on sales made in other than an arms-length transaction, the value of theNet Sales attributed under this Article 6 to this transaction shall be that which would have been received in an arms-length transaction, based on sales of like quantity and quality products on or about the time of this transaction.

6.9With regard to unreimbursed expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents included within theLicensed Patent Rights and paid by theNIH prior to the effective date of thisAgreement, theLicensee shall pay theNIH, as an additional royalty, within sixty (60) days of theNIH’s submission of a statement and request for payment to theLicensee, an amount equivalent to the unreimbursed patent expenses previously paid by theNIH.

6.10With regard to unreimbursed expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents included within theLicensed Patent Rights and paid by theNIH on or after the effective date of thisAgreement, theNIH, at its sole option, may require theLicensee:

(a)to pay theNIH on an annual basis, within sixty (60) days of theNIH's submission of a statement and request for payment, a royalty amount equivalent to these unreimbursed expenses paid during the previous calendar year(s);

(b)to pay these unreimbursed expenses directly to the law firm employed by theNIH to handle these functions. However, in this event, theNIH and not theLicensee shall be the client of the law firm; or

(c)under exceptional circumstances, theLicensee may be given the right to assume responsibility for the preparation, filing, prosecution, or maintenance of any patent application or patent included with theLicensed Patent Rights. In that event, theLicensee shall directly pay the attorneys or agents engaged to prepare, file, prosecute, or maintain these patent applications or patents and shall provide theNIH with copies of each invoice associated with these services as well as documentation that these invoices have been paid.

6.11TheNIH agrees, upon written request, to provide theLicensee with summaries of patent prosecution invoices for which theNIH has requested payment from theLicensee under Paragraphs 6.9 and 6.10. TheLicensee agrees that all information provided by theNIH related to patent prosecution costs shall be treated as confidential commercial information and shall not be released to a third party except as required by law or a court of competent jurisdiction.

6.12TheLicensee may elect to surrender its rights in any country of theLicensed Territory under any of theLicensed Patent Rights upon sixty (60) days written notice to theNIH and owe no payment obligation under Paragraph 6.10 for patent-related expenses paid in that country after the effective date of the written notice.

7.PATENT FILING, PROSECUTION, AND MAINTENANCE

7.1TheNIH agrees to take responsibility for the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in theLicensed Patent Rights.

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8.RECORD KEEPING

8.1TheLicensee agrees to keep accurate and correct records ofLicensed Products made, used, sold, or imported andLicensed Processes practiced under thisAgreement appropriate to determine the amount of royalties due theNIH These records shall be retained for at least five (5) years following a given reporting period and shall be available during normal business hours for inspection, at the expense of theNIH, by an accountant or other designated auditor selected by theNIH for the sole purpose of verifying reports and royalty payments hereunder. The accountant or auditor shall only disclose to theNIH information relating to the accuracy of reports and royalty payments made under thisAgreement. If an inspection shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then theLicensee shall reimburse theNIH for the cost of the inspection at the time theLicensee pays the unreported royalties, including any additional royalties as required by Paragraph 9.8. All royalty payments required under this Paragraph shall be due within sixty (60) days of the date theNIH provides theLicensee notice of the payment due.

9.ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS

9.1Prior to signing thisAgreement, theLicensee has provided theNIH with theCommercial Development Plan in Appendix E, under which theLicensee intends to bring the subject matter of theLicensed Patent Rights to the point ofPractical Application. ThisCommercial Development Plan is hereby incorporated by reference into thisAgreement. Based on this plan, performanceBenchmarks are determined as specified in Appendix D.

9.2TheLicensee shall provide written annual reports on its product development progress or efforts to commercialize under theCommercial Development Plan for each of theLicensed Fields of Use within sixty (60) days after December 31 of each calendar year. These progress reports shall include, but not be limited to: progress on research and development, status of applications for regulatory approvals, manufacture and status of sublicensing, marketing, importing, and sales during the preceding calendar year, as well as, plans for the present calendar year. TheNIH also encourages these reports to include information on any of theLicensee’s public service activities that relate to theLicensed Patent Rights. If reported progress differs from that projected in theCommercial Development Plan andBenchmarks, theLicensee shall explain the reasons for such differences. In any annual report, theLicensee may propose amendments to theCommercial Development Plan, acceptance of which by theNIH may not be denied unreasonably. TheLicensee agrees to provide any additional information reasonably required by theNIH to evaluate theLicensee’s performance under thisAgreement. TheLicensee may amend the Benchmarks at any time upon written approval by theNIH. TheNIH shall not unreasonably withhold approval of any request of theLicensee to extend the time periods of this schedule if the request is supported by a reasonable showing by theLicensee of diligence in its performance under theCommercial Development Plan and toward bringing theLicensed Products to the point ofPractical Application.

9.3TheLicensee shall report to theNIH the dates for achievingBenchmarks specified in Appendix D and theFirst Commercial Sale in each country in theLicensed Territory within thirty (30) days of such occurrences.

9.4TheLicensee shall submit to theNIH, within sixty (60) days after each calendar half-year ending June 30 and December 31, a royalty report, as described in the example in Appendix F, setting forth for the preceding half-year period the amount of theLicensed Products sold orLicensed Processes practiced by or on behalf of theLicensee in each country within theLicensed Territory, theNet Sales, and the amount of royalty accordingly due. With each royalty report, theLicensee shall submit payment of earned royalties due. If no earned royalties are due to theNIH for any reporting period, the written report shall so state. The royalty report shall be certified as correct by an authorized officer of theLicensee and shall include a detailed listing of all deductions made under Paragraph 2.11 to determineNet Sales made under Article 6 to determine royalties due.

9.5TheLicensee agrees to forward semi-annually to theNIH a copy of these reports received by theLicensee from its sublicensees during the preceding half-year period as shall be pertinent to a royalty accounting to theNIH by theLicensee for activities under the sublicense.

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9.6Royalties due under Article 6 shall be paid in U.S. dollars and payment options are listed in Appendix G. For conversion of foreign currency to U.S. dollars, the conversion rate shall be the New York foreign exchange rate quoted inThe Wall Street Journal on the day that the payment is due, and any loss of exchange, value, taxes, or other expenses incurred in the transfer or conversion to U.S. dollars shall be paid entirely by theLicensee. The royalty report required by Paragraph 9.4 shall be mailed to theNIH at its address forAgreement Notices indicated on the Signature Page.

9.7TheLicensee shall be solely responsible for determining if any tax on royally income is owed outside the United States and shall pay this tax and be responsible for all filings with appropriate agencies of foreign governments.

9.8Additional royalties may be assessed by theNIH on any payment that is more than ninety (90) days overdue at the rate of one percent (1%) per month. This one percent (1%) per month rate may be applied retroactively from the original due date until the date of receipt by theNIH of the overdue payment and additional royalties. The payment of any additional royalties shall not prevent theNIH from exercising any other rights it may have as a consequence of the lateness of any payment.

9.9All plans and reports required by this Article 9 and marked “confidential” by theLicensee shall, to the extent permitted by law, be treated by theNIH as commercial and financial information obtained from a person and as privileged and confidential, and any proposed disclosure of these records by theNIH under the Freedom of Information Act (FOIA),5 U.S.C. §552 shall be subject to the predisclosure notification requirements of45 CFR $5.65(d).

10.PERFORMANCE

10.1TheLicensee shall use its reasonable commercial efforts to bring theLicensed Products andLicensed Processes toPractical Application. “Reasonable commercial efforts” for the purposes of this provision shall include adherence to theCommercial Development Plan in Appendix E and performance of theBenchmarks in Appendix D. The efforts of a sublicensee shall be considered the efforts of theLicensee.

10.2TheLicensee agrees, after itsFirst Commercial Sale, to make reasonable quantities ofLicensed Products or materials produced through the use ofLicensed Processes available to patient assistance programs.

10.3TheLicensee agrees, after its FirstCommercial Sale and as part of its marketing and product promotion, to develop educational materials (e.g., brochures, website, etc.) directed to patients and physicians detailing theLicensed Products or medical aspects of the prophylactic and therapeutic uses of theLicensed Products.

10.4TheLicensee agrees to supply, to the Mailing Address forAgreement Notices indicated on the Signature Page, the Office of Technology Transfer,NIH with inert samples of theLicensed Products orLicensed Processes or their packaging for educational and display purposes only.

11.INFRINGEMENT AND PATENT ENFORCEMENT

11.1TheNIH and theLicensee agree to notify each other promptly of each infringement or possible infringement of theLicensed Patent Rights, as well as, any facts which may affect the validity, scope, or enforceability of theLicensed Patent Rights of which either Party becomes aware.

11.2In the event that a declaratory judgment action alleging invalidity of any of theLicensed Patent Rights shall be brought against the NHL theNIH agrees to notify theLicensee that an action alleging invalidity has been brought. TheNIH does not represent that it shall commence legal action to defend against a declaratory action alleging invalidity. TheLicensee shall take no action to compel theGovernment either to initiate or to join in any declaratory judgment action. Should theGovernment be made a party to any suit by motion or any other action of theLicensee, theLicensee shall reimburse theGovernment for any costs, expenses, or fees, which theGovernment incurs as a result of the motion or other action. Upon theLicensee's payment of all costs incurred by theGovernment as a result of theLicensee's joinder motion or other action, these actions by theLicensee shall not be considered a default in the performance of any material obligation under thisAgreement.

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12.NEGATION OF WARRANTIES AND INDEMNIFICATION

12.1TheNIH offers no warranties other than those specified in Article 1.

12.2TheNIH does not warrant the validity of theLicensed Patent Rights and makes no representations whatsoever with regard to the scope of theLicensed Patent Rights, or that theLicensed Patent Rights may be exploited without infringing other patents or other intellectual property rights of third parties.

12.3THENIH MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THELICENSED PATENT RIGHTS OR TANGIBLE MATERIALS RELATED THERETO.

12.4TheNIH does not represent that it shall commence legal actions against third parties infringing theLicensed Patent Rights.

12.5TheLicensee shall indemnify and hold theNIH, its employees, students, fellows, agents, and consultants harmless from and against all liability, demands, damages, expenses, and losses, including but not limited to death, personal injury, illness, or property damage in connection with or arising out of:

(a)the use by or on behalf of theLicensee, its sublicensees, its directors, employees, or third parties of anyLicensed Patent Rights; or

(b)the design, manufacture, distribution, or use of anyLicensed Products,Licensed Processes or materials by theLicensee, or other products or processes developed in connection with or arising out of theLicensed Patent Rights.

12.6TheLicensee agrees to maintain a liability insurance program consistent with sound business practice.

13.TERM, TERMINATION, AND MODIFICATION OF RIGHTS

13.1ThisAgreement is effective when signed by all parties, unless the provisions of Paragraph 14.15 are not fulfilled, and shall extend to the expiration of the last to expire of theLicensed Patent Rights unless sooner terminated as provided in this Article 13.

13.2In the event that theLicensee is in default in the performance of any material obligations under thisAgreement, including but not limited to the obligations listed in Paragraph 13.5, and if the default has not been remedied within ninety (90) days after the date of notice in writing of the default, theNIH may terminate thisAgreement by written notice and pursue outstanding royalties owed through procedures provided by theFederal Debt Collection Act.

13.3In the event that theLicensee becomes insolvent, files a petition in bankruptcy, has such a petition filed against it, determines to file a petition in bankruptcy, or receives notice of a third party's intention to file an involuntary petition in bankruptcy, theLicensee shall immediately notify theNIH in writing.

13.4TheLicensee shall have a unilateral right to terminate thisAgreement in any country or territory by giving theNIH sixty (60) days written notice to that effect.

13.5TheNIH shall specifically have the right to terminate or modify, at its option, thisAgreement, if theNIH determines that theLicensee:

(a)is not executing theCommercial Development Plan submitted with its request for a license and theLicensee cannot otherwise demonstrate to theNIH’s satisfaction that theLicensee has taken, or can be expected to take within a reasonable time, effective steps to achievePractical Application of theLicensed Products or Licensed Processes;

(b)has not achieved theBenchmarks as may be modified under Paragraph 9.2;

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(c)has willfully made a false statement of, or willfully omitted, a material fact in the license application or in any report required by thisAgreement;

(d)has committed a material breach of a covenant or agreement contained in thisAgreement;

(e)is not keepingLicensed Products orLicensed Processes reasonably available to the public after commercial use commences;

(f)cannot reasonably satisfy unmet health and safety needs; or

(g)cannot reasonably justify a failure to comply with the domestic production requirement of Paragraph 5.2, unless waived.

13.6In making the determination referenced in Paragraph 13.5, theNIH shall take into account the normal course of such commercial development programs conducted with sound and reasonable business practices and judgment and the annual reports submitted by theLicensee under Paragraph 9.2. Prior to invoking termination or modification of thisAgreement under Paragraph 13.5, theNIH shall give written notice to theLicensee providing theLicensee specific notice of, and a ninety (90) day opportunity to respond to, theNIH’s concerns as to the items referenced in 13.5(a)-13.5(g). If theLicensee fails to alleviate theNIH’s concerns as to the items referenced in 13.5(a)-13.5(g) or fails to initiate corrective action to theNIH’s satisfaction, theNIH may terminate thisAgreement.

13.7TheNIH reserves the right according to35 U.S.C. 3209(d)(3) to terminate or modify thisAgreement if it is determined that the action is necessary to meet the requirements for public use specified by federal regulations issued after the date of the license and these requirements are not reasonably satisfied by theLicensee.

13.8Within thirty (30) days of receipt of written notice of theNIH’s unilateral decision to modify or terminate this Agreement, theLicensee may, consistent with the provisions of37 CFR §404.11, appeal the decision by written submission to the designated theNIH official. The decision of the designatedNIH official shall be the final agency decision. TheLicensee may thereafter exercise any and all administrative or judicial remedies that may be available.

13.9Within ninety (90) days of expiration or termination of thisAgreement under this Article 13, a final report shall be submitted by theLicensee. Any royalty payments, including those incurred but not yet paid (such as the full minimum annual royalty), and those related to patent expense, due to theNIH shall become immediately due and payable upon termination or expiration. If terminated under this Article 13, sublicensees may elect to convert their sublicenses to direct licenses with theNIH pursuant to Paragraph 4.3. Unless otherwise specifically provided for under this Agreement, upon termination or expiration of thisAgreement, theLicensee shall return allLicensed Products or other materials included within theLicensed Patent Rights to theNIH or provide theNIH with written certification of the destruction thereof. TheLicensee may not be granted additional theNIH licenses if the final reporting requirement is not fulfilled.

14.GENERAL PROVISIONS

14.1Neither party may waive or release any of its rights or interests in thisAgreement except in writing. The failure of theGovernment to assert a right hereunder or to insist upon compliance with any term or condition of thisAgreement shall not constitute a waiver of that right by theGovernment or excuse a similar subsequent failure to perform any of these terms or conditions by theLicensee.

14.2ThisAgreement constitutes the entire agreement between the Parties relating to the subject matter of theLicensed Patent Rights,Licensed Products andLicensed Processes, and all prior negotiations, representations, agreements, and understandings are merged into, extinguished by, and completely expressed by thisAgreement.

14.3The provisions of thisAgreement are severable, and in the event that any provision of thisAgreement shall be determined to be invalid or unenforceable under any controlling body of law, this determination shall not in any way affect the validity or enforceability of the remaining provisions of thisAgreement.

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14.4If either party desires a modification to thisAgreement, the parties shall, upon reasonable notice of the proposed modification by the party desiring the change, confer in good faith to determine the desirability of the modification. No modification shall be effective until a written amendment is signed by the signatories to thisAgreement or their designees.

14.5The construction, validity, performance, and effect of thisAgreement shall be governed by Federal law as applied by the Federal courts in the District of Columbia.

14.6AllAgreement notices required or permitted by thisAgreement shall be given by prepaid, first class, registered or certified mail or by an express/overnight delivery service provided by a commercial carrier, properly addressed to the other party at the address designated on the Signature Page, or to any other address as may be designated in writing by such other party.Agreement notices shall be considered timely if such notices are received on or before the established deadline date or sent on or before the deadline date as verifiable by U.S. Postal Service postmark or dated receipt from a commercial carrier. Parties should request a legibly dated U.S. Postal Service postmark or obtain a dated receipt from a commercial carrier or the U.S. Postal Service. Private metered postmarks shall not be acceptable as proof of timely mailing.

14.7ThisAgreement shall not be assigned or otherwise transferred (including any transfer by legal process or by operation of law, and any transfer in bankruptcy or insolvency, or in any other compulsory procedure or order of court) except to theLicensee’s Affiliate(s) without the prior written consent of theNIH. The parties agree that the identity of the parties is material to the formation of thisAgreement and that the obligations under thisAgreement are nondelegable. In the event that theNIH approves a proposed assignment, theLicensee shall pay theNIH, as an additional royalty, one percent (1%) of the fair market value of any consideration received for any assignment of thisAgreement within sixty (60) days of the assignment.

14.8TheLicensee agrees in its use of anyNIH-supplied materials to comply with all applicable statutes, regulations, and guidelines, including theNIH and theHHS regulations and guidelines. TheLicensee agrees not to use the materials for research involving human subjects or clinical trials in the United States without complying with21 CFR Part 50 and45 CFR Part 46. TheLicensee agrees not to use the materials for research involving human subjects or clinical trials outside of the United States without notifying theNIH, in writing, of the research or trials and complying with the applicable regulations of the appropriate national control authorities. Written notification to theNIH of research involving human subjects or clinical trials outside of the United States shall be given no later than sixty (60) days prior to commencement of the research or trials.

14.9TheLicensee acknowledges that it is subject to and agrees to abide by the United States laws and regulations (including theExport Administration Act of 1979 andArms Export Control Act) controlling the export of technical data, computer software, laboratory prototypes, biological materials, and other commodities. The transfer of these items may require a license from the appropriate agency of theGovernment or written assurances by theLicensee that it shall not export these items to certain foreign countries without prior approval of the agency. TheNIH neither represents that a license is or is not required or that, if required, it shall be issued.

14.10TheLicensee agrees to mark theLicensed Products or their packaging sold in the United States with all applicable U.S. patent numbers and similarly to indicate “Patent Pending” status. AllLicensed Products manufactured in, shipped to, or sold in other countries shall be marked in a manner to preserve theNIH patent rights in those countries.

14.11By entering into thisAgreement, theNIH does not directly or indirectly endorse any product or service provided, or to be provided, by theLicensee whether directly or indirectly related to thisAgreement. TheLicensee shall not state or imply that thisAgreement is an endorsement by theGovernment, theNIH, any otherGovernment organizational unit, or anyGovernment employee. Additionally, theLicensee shall not use the names of theNIH,FDA orHHS or theGovernment or their employees in any advertising, promotional, or sales literature without the prior written approval of theNIH.

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14.12The Parties agree to attempt to settle amicably any controversy or claim arising under thisAgreement or a breach of thisAgreement, except for appeals of modifications or termination decisions provided for in Article 13. TheLicensee agrees first to appeal any unsettled claims or controversies to the designated theNIH official, or designee, whose decision shall be considered the final agency decision. Thereafter, theLicensee may exercise any administrative or judicial remedies that may be available.

14.13Nothing relating to the grant of a license, nor the grant itself, shall be construed to confer upon any person any immunity from or defenses under the antitrust laws or from a charge of patent misuse, and the acquisition and use of rights pursuant to37 CFR Part 404 shall not be immunized from the operation of state or Federal law by reason of the source of the grant.

14.14Paragraphs 8.1,9.7-9.9, 12.1-12.5, 13.8, 13.9, 14.12 and 14.14 of thisAgreement shall survive termination of thisAgreement.

14.15The terms and conditions of thisAgreement shall, at theNIH’s sole option, be considered by theNIH to be withdrawn from theLicensee’s consideration and the terms and conditions of thisAgreement, and theAgreement itself to be null and void, unless thisAgreement is executed by theLicensee and a fully executed original is received by theNIH within sixty (60) days from the date of theNIH signature found at the Signature Page.

SIGNATURES BEGIN ON NEXT PAGE

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NIH PATENT LICENSE AGREEMENT –NONEXCLUSIVE

SIGNATURE PAGE

For theNIH:

/s/ Richard U. Rodriguez		7-16-14
Richard U. Rodriguez		Date

Director, Division of Technology Development and Transfer

Office of Technology Transfer

National Institutes of Health

Mailing Address or E-mail Address forAgreement notices and reports:

Chief, Monitoring & Enforcement Branch

Office of Technology Transfer

National Institutes of Health

E-mail: ########

For theLicensee (Upon, information and belief, the undersigned expressly certifies or affirms that the contents of any statements of theLicensee made or referred to in this document are truthful and accurate.):

By:

/s/ Dean Petkanas		7-17-14
Signature of Authorized Official		Date

Dean Petkanas
Printed Name

Chief Executive Officer
Title

I.Official and Mailing Address forAgreement notices:

Dean Petkanas

Name

Chief Executive Officer

Title

Mailing Address:

Pennsylvania Biotechnology Center

3805 Old Easton Road

Doylestown, PA 18902

Email Address:

Phone:

Fax:

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II.Official and Mailing Address for Financial notices (theLicensee’s contact person for royalty payments)

Dean Petkanas

Name

Chief Executive Officer

Title

Mailing Address:

Pennsylvania Biotechnology Center

3805 Old Easton Road

Doylestown, PA 18902

Email Address:

Phone:

Fax:

Any false or misleading statements made, presented, or submitted to theGovernment, including any relevant omissions, under thisAgreement and during the course of negotiation of thisAgreement are subject to all applicable civil and criminal statutes including Federal statutes31 U.S.C. §§3801-3812 (civil liability) and18 U.S.C. §1001 (criminal liability including fine(s) and/or imprisonment).

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APPENDIX A – PATENT(S) OR PATENT APPLICATION(S)

Patent(s) or Patent Application(s):

I.U. S. Patent 6,630,507, issued October 7,2003, entitled “Cannabinoids as Antioxidants and Neuroprotectants” [HHS Ref. No. E-287-I997/2-US-06]:

II.Australian Patent 766988, issued February 12, 2004, entitled “Cannabinoids as Antioxidants and Neuroprotectants” [HUS Ref. No. E-287-I997/2-AU-02];

III.European Patent 1071419, issued July 25, 2007, entitled “Cannabinoids as Antioxidants and Neuroprotectants” [HHS Ref. No. E-287-I997/2-EP-04];

IV.U. K. Patent 1071419, issued July 25, 2007, entitled “Cannabinoids as Antioxidants and Neuroprotectants” [HHS Ref. No. E-287-1997/2-GB-07];

V.Irish Patent E14850, issued July 25, 2007, entitled “Cannabinoids as Antioxidants and Neuroprotectants” [HHS Ref. No. E-287-I997/2-IE-08].

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APPENDIX B – LICENSED MELDS OF USE AND TERRITORY

I.Licensed Fields of Use:

(a)The development and sale of cannabinoid(s) and cannabidiol(s) based therapeutics as antioxidants and neuroprotectants for use and delivery in humans, asFDA approved drugs, for the treatment of Chronic Traumatic Encephalopathy (CTE) in humans.

II.Licensed Territory:

(b)Worldwide.

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APPENDIX C – ROYALTIES

Royalties:

I.TheLicensee agrees to pay to theNIH a noncreditable, nonrefundable license issue royalty in the amount of twenty-five thousand Dollars ($25,000) within sixty (60) days from the effective date of thisAgreement.

II.TheLicensee agrees to pay to theNIH a nonrefundable minimum annual royalty in the amount of ten thousand Dollars ($10,000) as follows:

(a)The first minimum annual royalty is due within sixty (60) days of the effective date of thisAgreement and may be prorated according to the fraction of the calendar year remaining between the effective date of thisAgreement and the next subsequent January I; and

(b)Subsequent minimum annual royalty payments are due and payable on January I of each calendar year and may be credited against any earned royalties due for sales made in that year.

III.TheLicensee agrees to pay theNIH earned royalties of five percent (5%) onNet Sales by or on behalf ofLicensee or its sublicensees.

IV.TheLicensee agrees to pay theNIHBenchmark royalties within sixty (60) days of achieving eachBenchmark:

(a)Forty thousand U.S. dollars ($40,000) upon initiation of first Phase I clinical trial or foreign equivalent.

(b)One hundred thousand U.S. dollars ($100,000) upon initiation of first Phase II clinical trial or foreign equivalent.

(c)Two hundred and fifty thousand U.S. dollars ($250,000) upon completion of first Phase III clinical trial or foreign equivalent.

(d)Five hundred thousand U.S. dollars ($500,000) upon gaining first marketing approval by FDA or foreign equivalent.

V.TheLicensee agrees to pay theNIH additional sublicensing royalties of twenty percent (20%) on the fair market value of any consideration received for granting each sublicense within sixty (60) days of the execution of each sublicense.

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APPENDIX D – BENCHMARKS AND PERFORMANCE

TheLicensee agrees to the followingBenchmarks for its performance under thisAgreement and, within thirty (30) days of achieving aBenchmark, shall notify theNIH that theBenchmark has been achieved.

I.Complete Pre-Clinical / Efficacy and Toxicology Studies by [********]

II.Submit IND by [********]

III.Complete Phase 1 Clinical Trials by [********]

IV.Complete Phase 2a Clinical Trials by [********]

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APPENDIX E – COMMERCIAL DEVELOPMENT PLAN

Stage I: Proof of Concept Studies Using Animal models

Closed head injury will be produced in rats as a model of chronic traumatic encephalopathy (CTE). The intended cannabidiol compounds will be administered to treat both the acute (1-7 days) and chronic (6 weeks) sequelae of brain dysfunction and damage. Multidisciplinary assays will be used to determine the differential effects of the novel cannabidiol compounds versus placebo in countering the effects of the head injury. To assess multiple aspects of brain function, behavioral tests will be employed that include locomotor activity, rotorod performance and several neurocognitive tests. The behavioral assessments will be complemented by measures of brain edema and the determination of brain histological analysis. In addition, studies measuring blood glutamate and brain chemistry (glial fibrillary acidic protein, caspase 3, TUNEL and malondialdehyde) will be determined to identify leads with potentially superior efficacy and/or safety. Additional compounds may be cannabis derived, synthesized or produced by chemical modification of plant derivatives. This discovery phase of the commercial development plan will take approximately [***].

Stage II: Preclinical Pharmacology, Toxicology Studies and GMP Manufacturing

The transition from discovery to pre-clinical and clinical development will be a continuum; results of preliminary pharmacology and toxicology testing will be a confirmation forLicensee's target drug candidates.Licensee’s pre-clinical development program will consist of the following six major efforts:

A.Manufacture of drug substance /active pharmaceutical ingredient;

B.Pre-formulation, formulation and dosage design;

C.Analytical and bioanalytical methods development and validation;

D.Drug metabolism, and pharmacokinetics studies;

E.Toxicology, repeat-dose toxicity studies; and

F.Good Manufacturing Practice (GMP) manufacture and documentation of drug products for clinical trials use.

Stage III: IND Submission and Clinical Trials

The Investigational New Drug (IND) application will summarize the results of the above activities for submission to the US Food and Drug Administration (FDA). The primary studies will be complemented with any additional work required and likely to improve the likelihood of aFDA IND acceptance.Licensee will also pursue similar work using other cannabinoids/ cannabidiols to provide additional leads with potentially superior efficacy and/or safety. A clinical trial will be designed to involve daily chronic administration based upon repeat-dose toxicity studies in preclinical animal models.

Prior to the completion of pre-clinical studies.Licensee will begin the process of selecting at least three academic institutions to participate in conducting the proposed clinical trials for the lead drug candidate.Licensee plans on furthering discussions with the University of Mississippi and Rutgers University, and also plans to reach out to the University of California at San Diego as a third participant in the proposed clinical trials.

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APPENDIX F – EXAMPLE ROYALTY REPORT

Required royalty report information includes:

OTT license reference number (L-XXX-200X/0)

Reporting period

Catalog number and units sold of each Licensed Product (domestic and foreign)

Gross Sales per catalog number per country

Total Gross Sales

Itemized deductions from Gross Sales

Total Net Sales

Earned Royalty Rate and associated calculations

Gross Earned Royalty

Adjustments for Minimum Annual Royalty (MAR) and other creditable payments made

Net Earned Royalty due

Example

Catalog Number	Product Name	Country	Units Sold	Gross Sales (US$)
1	A	US	250	62,500
1	A	UK	32	16,500
1	A	France	25	15,625
2	B	US	0	0
3	C	US	57	57,125
4	D	US	12	1,500
		Total Gross Sales Less Deductions: Freight Returns Total Net Sales Royalty Rate Royalty Due Less Creditable Payments Net Royalty Due		153,250 3,000 7,000 143,250 8% 11.460 10,000 1,460

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APPENDIX G – ROYALTY PAYMENT OPTIONS

The OTT License Number MUST appear on payments, reports and correspondence.

Automated Clearing House (ACH) for payments through U.S. banks only

TheNIH encourages its licensees to submit electronic funds transfer payments through the Automated Clearing House (ACH). Submit your ACH payment through the U.S. Treasury web site located at:https://www.pay.gov. Locate the “NIH” Agency Form” through the Pay.gov “Agency List”.

Electronic Funds Wire Transfers

The following account information is provided for wire payments. In order to process payment via Electronic Funds Wire Transfer sender MUST supply the following information within the transmission:

Drawn on aU.S. bank account via FEDWIRE should be sent directly to the following account:

Beneficiary Account:Federal Reserve Bank of New York or TREAS NYC

Bank:Federal Reserve Bank of New York

ABA#########

Account Number:########

Bank Address:########

Payment Details:License Number (L-XXX-XXXX)

Name of the Licensee

Drawn on aforeign bank account should be sent directly to the following account. Payment must be sent inU.S. Dollars (USD) using the following instructions:

Beneficiary Account:Federal Reserve Bank of New York/ITS or FRBNY/ITS

Bank:Citibank N.A. (New York)

SWIFT Code:########

Account Number:########

Bank Address:########

Payment Details (Line 70):########

License Number (L-XXX-XXXX)

Name of the Licensee

Detail of Charges (line 71a):Charge Our

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Checks

All checks should be made payable to “NIH Patent Licensing”

Checks drawn on aU.S. bank account and sent by US Postal Service should be sent directly to the following address:

National Institutes of Health (NIH)

########

Checks drawn on a U.S. bank account and sent byovernight or courier should be sent to the following address:

US Bank

########

Phone: ########

Checks drawn on aforeign bank account should be sent directly to the following address:

National Institutes of Health (NIH)

Office of Technology Transfer

Royalties Administration Unit

########

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Neuropathix (NPTX) S-1/AIPO registration (amended)